Maintenance for Building Services
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1 A BSRIA Guide Maintenance for Building Services How to acquire maintenance services contracts By Jo Harris BG 3/2008 BG (Maintenance contracts) cover 6.p653 06/06/2008, 09:26
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3 ACKNOWLEDGEMENTS This fourth edition has been re-written by Jo Harris and designed and produced by Ruth Radburn. BSRIA s Mike Smith conducted the research for the original Government-funded (DoE) project. BSRIA would like to thank the following companies for their contribution to the original project, which led to the publication of the first edition of this Guide. Associated Heat Services BAA Barclays Bank British Telecommunications Department of Health Drake and Scull Lloyds Bank (now Lloyds TSB) Mala Maintenance Mecserve MJN Maintenance National Westminster Bank Project Management Partnership Royal Mail Letters Satchwell Control Systems Short Brothers All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means electronic or mechanical including photocopying, recording or otherwise without prior written permission of the publisher. BSRIA June 2008 ISBN Printed by Image Data Ltd.
4 PREFACE Maintenance is an essential part of operating a building. The operation and maintenance of a building involves a number of activities that need to be addressed by a building occupier or owner: preventative maintenance, breakdown maintenance, statutory inspections, and minor new works. Some or all of these functions can be passed to a maintenance contractor. As buildings become more complex and public awareness of workplace health matters increases, the requirement for comprehensive maintenance of building services also rises. Statutory obligations must be fulfilled in many aspects of maintenance, and an outline of the requirements is provided in this guide. Buildings and building services equipment will need lifetime maintenance to ensure safe and efficient operation. Without proper and adequate maintenance there will be an increase in unforeseen failures and a reduction in system operating life. Maintenance of a building is usually split into three areas, services maintenance for mechanical and electrical plant, fabric maintenance for the building envelope, and grounds maintenance of external landscapes. This guide has been written with services maintenance contracts in mind but the guidance can be used equally for both fabric and grounds maintenance. This easy-to-use, colour-coded guide is divided into four logical stages. Each stage is a part of the process to achieving successful maintenance contracts. This is a business guide, not a legal guide, all clients and contractors should contact a legal advisor before entering into any significant contract. Jo Harris BSRIA, June 2008
5 CONTENTS INTRODUCTION 1 HOW DO WE MAINTAIN BUILDINGS? 6 STATUTORY REQUIREMENTS 11 1 CONTRACT DEVELOPMENT Legal position Standard forms of contract Contract concepts Typical issues with contract types Conditions of contract 25 2 SPECIFICATION AND SCHEDULE Work schedule General requirements Specification overview 43 3 TENDER AND EVALUATION Tendering requirements Re-tendering 51 4 MONITORING AND CONTROL Documentation 53 FURTHER READING 67 APPENDICES APPENDIX A1 Building services plant statutory inspections 60 APPENDIX A2 Statutory testing frequency check sheets 61 APPENDIX A3 Documentation to be held by the building owner or occupier 62 APPENDIX A4 Additional Legislation 63
6 TABLES Table 1: The appropriate form of contract depends on the scenario Table 2: Documents for monitoring contract performance Table 3: Evaluation criteria FIGURES Figure 1: The process of procuring a maintenance contract Figure 2: Map of contract maintenance market Figure 3: Contract options
7 INTRODUCTION INTRODUCTION INTRODUCTION This is the fourth edition of AG 4/89.2 Maintenance Contracts for Building Engineering Services. It has been updated where appropriate to reflect changes in regulations and working practices since the last edition. Some aspects of building services maintenance are now covered by statutory requirements. This guide now covers these regulations. Changes in the 2006 Building Regulations have increased the responsibility of building designers and contractors. The handover of new buildings, or the replacement of key building services systems in existing buildings, now require the creation of a building logbook. The building logbook is designed to provide enough details of installed building services plant and controls and their method of operation and maintenance, to enable energy consumption to be monitored and controlled by the building occupier. The content and quality of the logbook is the responsibility of the owner or occupier. As part of the European Union s Energy Performance of Buildings Directive (EPBD), from 1 st October 2008 all homes and commercial buildings in England and Wales that are built, brought, sold, and rented are required to have Energy Performance Certificates (EPC) and all public buildings above 1000 sq m require a Display Energy Certificate (DEC). These provide information on the levels of energy consumed and CO 2 emissions the building generates. This forms part of the government s plan to reduce CO 2 emissions, 20% by 2020 and 60% by 2050 with improvements on energy use and efficiency as part of the process in achieving these targets. In addition to these EPC and DEC certificates the Communities and Local Government department (CLG) are also introducing air conditioning system inspections and guidance for the efficient use of boilers. Maintenance contractors can be called upon to ensure you comply with this legislation. The health and safety aspects of maintenance are also of increasing importance. For example, Legionnaires disease from water systems and cooling towers can result from poor or inadequate maintenance. Among other issues, this can lead to serious events that are of increasing concern to building owners or occupiers. There are different ways of carrying out building maintenance. Internal maintenance requires a dedicated team employed by the occupier of the building. This team will make use of maintenance instructions defined internally. Generally, even in-house teams will require the services of external contractors. This can be on a single occasion or more regularly to service specialist items of plant such as lifts, chillers and boilers. These regular visits will require contract documentation, which, generally, are based on standard forms of contract. These should be examined as carefully as any other contract. Outsourcing or out-tasking building maintenance is increasing in popularity. This service consists of quantifiable parts (for example scheduled planned preventative maintenance) but can also include an unquantifiable part, such as reactive maintenance to deal with failures or breakdowns. Outsourcing does not eliminate the need for the client organisation to maintain supervisory and auditing roles, so this is also covered by this guide. 1
8 INTRODUCTION Very large properties tend to have a resident maintenance person or a facilities manager. In a smaller organisation it may fall to an existing employee to fulfil the facilities management role. The British Institute of Facilities Managers (BIFM) defines facilities management (FM) as: The integration of multi-disciplinary activities within the built environment and the management of their impact upon people and the workplace. Generally facilities managers will be responsible for supplying technical services (generally referred to as hard services) including maintenance of mechanical and electrical plant, but also provide ancillary soft services including catering, clearing and security. This guide largely addresses the hard services. Very small buildings usually have simple services. Even if some part fails completely the building can often continue to function until a repair is made. Medium-sized premises are more critical, and the procured maintenance services need to be of an appropriate quality, a competitive tender is usually undertaken to obtain contract maintenance. Although this guide has been aimed at the building owner or occupier of the medium-sized building, it will also be a useful reference document for the large building owner or occupier. This document aims to give guidance to those with responsibility for acquiring maintenance services from an external source, including: Outlining the statutory requirements of the building owner or occupier Contract requirements What should be included in a specification The process of tendering Guidance on the importance of monitoring and control. There are fundamental differences between a construction contract to build an asset (such as a building), and a contract drawn up to procure maintenance services. Construction involves a clearly defined product to be completed at a stated time. By contrast most maintenance contracts run for longer than the period of construction. Contractual requirements can also change over the contract period. Building services maintenance is about covering the performance of plant and equipment in order to support core business functions. Loss of business is a consequence of non-performance of plant and can be much more than the costs of the plant item itself or the cost of maintenance. Faults arising from poor maintenance may take many years to emerge and can lead to very costly repairs or replacement. A common misconception is that there is no need for a maintenance contract to begin until after the 12 month defects liability period has expired on new installations. To ensure health and safety requirements are adequately covered, efficiency maintained and longevity of the plant achieved, maintenance cover is required from day one of operation. 2
9 INTRODUCTION It is important for both client and contractor to be clear about maintenance needs and to select the correct contract for the job. This means clear documentation, able to be understood by both parties, and which both cover the client s requirements and allow the contractor to price the work realistically. The documents must provide the framework for the client to evaluate each contractor s tender on an equal basis, and include the procedures and reports required to carry out the work. This application guide is aimed at helping organisations get the right maintenance for their needs, at the right cost while minimising the risks. Some organisations, in their drive to cut operating costs, forget that although maintenance of their buildings is an overhead it is an essential part of business. Maintenance can directly effect the business operating costs and has a part to play in ensuring good staff health and morale. When performed correctly maintenance can, in the long term, keep capital costs under control. Any organisation occupying a building will have some responsibility for maintenance of it and its associated building services. More than ever building owners and occupiers are being held accountable for the health and safety aspects of building occupation. Statutory requirements have been provided in this guide to ensure awareness of key legislation, which affects owners and occupiers. Inspections and maintenance requirements are explained for lifts, fire alarms, electrical systems and pressure systems, all of which need to comply with legislation. The appendices in this guide provide check sheets that highlight the minimum inspection frequencies and a list of the documents a building occupier should hold or have access to. Maintenance contract documents are legal documents needed to ensure the organisation has recourse to the courts if a contractor fails to deliver the services for which the organisation has paid for. Standard forms of contracts are referenced, but if these do not suit a company s needs an outline of the areas that need to be covered by a bespoke solution have been provided. This is not a guide to legal jargon and contract clauses that is best left to the legal experts instead this guide is aimed at making sure you consider all the conditions that need to be included in a contract. When things go wrong the courts use these conditions to make their rulings, therefore they need to be precise, clear and unambiguous. There are four stages to placing a maintenance contract (see Figure 1, page 5): 1 Contract development 2 Specification and schedule 3 Tender and evaluation 4 Monitoring and control 3
10 INTRODUCTION Contract development To develop a contract you need to consider the maintenance strategy. Maintenance strategy needs to comply with legislation as a minimum and then tailored to match your business needs. The client also needs to decide the type of contract and specific conditions that will be placed. This stage is explained with examples given to aid decision-making. Specification and schedule The second stage is the specification. This section sets out the maintenance requirements of the business. It is generally accepted that, for low value maintenance, the contractors will provide their own specification. This should outline what services can be expected and at what cost. This guide will enable contractor specifications to be checked and allow a bespoke specification to be written. Tender and evaluation Tendering is the third stage. A tender document is used to seek a number of bidders for a maintenance contract. The contents of the document are discussed along with the process of selecting bidders, dealing with the preliminary and formal enquiries and final evaluation of the tender returns. On completion of the tendering exercise a suitable bidder can be selected and a contract entered into. In some cases it is possible that no suitable bidders are received. In this case the whole exercise needs to be repeated and the documentation checked to ensure there are no major omissions. Monitoring and control Monitoring and control is the last stage and it is an important part of managing the maintenance contract. Any organisation that employs a contractor to supply maintenance services should ensure the work is getting done and that the standard of work is good. This final section will give you an introduction to the tools such as service reports, work orders and inspections that can be used to do that. BSRIA s Operation and Maintenance Benchmarking Network has been capturing opinions on customer satisfaction with maintenance contracts for the last four years. The results have shown the importance of good communication and documentation between contractor and customer. To get a free copy of the KPI wall chart that allows you to benchmark your level of satisfaction with your contractor fm@bsria.co.uk. 4
11 INTRODUCTION Figure 1: The process of procuring a maintenance contract. This diagram illustrates the process of procuring a maintenance contract. Each stage is shown with key questions that need to be answered for the process to be completed effectively. 5
12 CONTRACT DEVELOPMENT CONTRACT DEVELOPMENT 1 CONTRACT DEVELOPMENT There are many forms of contract used to procure maintenance activities, ranging from standard contract forms to bespoke forms developed by organisations to suit their needs. Contract documents also vary, from very simple works orders to complex sets of documents such as those found in fully comprehensive contracts. The key to a successful contract is a complete understanding of what is required by both parties with respect to the type and level of service. Any contract must be fair and reasonable to both parties, while enabling the contractor to make sufficient profit to have an incentive to perform well and thus secure further work. Employers should feel they are getting value for money. 1.1 LEGAL POSITION In an ideal world, business would be conducted on a goodwill basis, where the contractor is mindful of future business opportunities and the client expects requirements to be fulfilled effectively. Any disputes would be resolved by discussion. In practice this is not always the case, so certain terms and conditions must be agreed in the contract. Without proper terms and conditions, any default by either party could result in unlimited damages being claimed under common law. The contractor s tender represents the offer and the client s official order is the acceptance. It should be remembered that for a contract to be legally enforceable it need not be in writing. A contract is made when there is an unqualified acceptance of an offer. The client sometimes issues letters of intent or memorandums of understanding. These authorise the contractor to start providing the services. While these documents may be necessary in certain circumstances, generally they should be avoided. Unnecessary documentation can delay the formal contract. Very rarely do memorandums of understanding set out what is expected of either party. For any contract certain concepts must be established. These are: 1.2 STANDARD FORMS OF CONTRACT Intention to be legally bound by the terms of the contract Offer and Acceptance the offer made by one party is unconditionally accepted by the other Consideration which means that both parties are bound to give something to each other There are many standard (or model) forms of contract in the civil engineering, construction, maintenance and building services industries, all of which have been drawn up with a specific application in mind. They are the product of much debate and in their model forms have been subjected to considerable legal scrutiny. For some model forms a considerable amount of case law has been built up. Contracts specific to maintenance are less common. The first two contracts in the following list of published standard forms of contracts are specifically for facilities management contracts, but they can also be used for the provision of maintenance services. The others are written with 19
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